That’s according to a Friday (Jan. 30) report from Reuters, which noted that the arrangement between the two companies had already been strained when Saks filed for bankruptcy last month, even though the retailer hadn’t specified whether it would exercise its right under Chapter 11 bankruptcy to reject the deal.
Now, the luxury department store company is planning to close its Saks on Amazon storefront so it can focus on sections of its business it views as providing greater potential for growth, the report, citing a source familiar with the matter.
“The Saks on Amazon storefront saw limited brand participation,” the source said, adding that the company feels it would be better served driving traffic to its own website.
PYMNTS has contacted Saks and Amazon for comment but has not yet gotten a reply.
An Amazon spokesperson told Reuters: “Beyond the Saks experience, the Amazon luxury store continues to offer a wide selection of high-end designer styles, and we’re adding more luxury brands regularly.”
Saks declined to comment when reached by the news outlet.
The news came one day after another Reuters report that Saks was preparing to wind down the bulk of its off-price operations — including most Saks Off 5th locations and the entirety of its Neiman Marcus Last Call stores — as it focuses more on full-price luxury sales.
The decision came barely a year after a deal to merge Saks Fifth Avenue, Bergdorf Goodman and Neiman Marcus into one entity. Saks said in a bankruptcy filing that its off-price division was a financial drag on the company, with the Saks Off 5th business — covering both brick-and-mortar and eCommerce operations — projected to lose $139 million in fiscal year 2025.
Saks declared bankruptcy Jan. 14 amid mounting debts, saying it was now “evaluating its operational footprint.”
Amazon, which had made an equity investment in Saks Global at the time of its formation in 2024, quickly challenged the bankruptcy, accusing Saks of breaking an agreement on the sale of Saks products on its website.
The eCommerce giant argued that its $475 million investment in Amazon is now “presumptively worthless,” and that the $1.75 billion in funding Saks had secured included terms harmful to creditors.
As noted here last week, Saks’ downsizing is indicative of broader structural challenges in the brick-and-mortar sector. PYMNTS CEO Karen Webster wrote that physical department stores have lost their competitive “anchor” status to digital spaces and artificial intelligence agents.
And although luxury store counts are expected to decline, analysts suggest the resulting vacancies may yield expansion opportunities for off-price and beauty retailers this year.
